Carbon credits and urban freight consolidation: An experiment using agent based simulation

Abstract

Consolidation of goods is a promising strategy for reducing city logistics problems. For the last two decades, the concept of urban consolidation centres (UCCs) has been implemented in different cities. UCCs that were started for special subsectors (e.g. construction material handling) are relatively successful; however, general purpose UCCs are not performing well at all. Most UCCs are financially dependent on government support. The UCC concept can be successfully implemented by developing a consistent subsidy or tax scheme aiming to internalize the negative external effects of conventional urban goods distribution. In this paper, we describe and test such policy - a delivery cap and price (DCAP) scenario, combined with a subsidy for a UCC alternative – to reduce carbon emissions for urban goods delivery. The scenario introduces a cap on goods deliveries made to shopkeepers by conventional vehicles, using so-called carbon credit points (CCPs). We demonstrate this policy with a stylized implementation of a city logistics agent based model for the inner city of Rotterdam. The results indicate that this financial scheme could positively influences the use of UCC, ensures its financial viability and significantly reduce the external effects of urban freight transport.